Research suggests that a small number of traders may be influencing prediction markets, but an even smaller group is accumulating the majority of the profits. A recent report by blockchain analytics firm Solidus Labs discovered that profit concentration on Polymarket is extreme, with less than 1% of wallets capturing roughly half of all gains in key markets.
Between December 2025 and February 2026, just 0.55% of profitable maker wallets captured 50% of gains, while 0.26% of winning taker wallets accounted for nearly the same share, with roughly $8 million of about $16 million in profits going to each of these tiny cohorts. This data supports previous academic findings that a small minority of traders drives most price discovery, with about 3% of Polymarket traders responsible for this phenomenon. The report highlights that this concentration does not necessarily imply wrongdoing, as some traders may be more sophisticated or better capitalized.
However, the scale of the imbalance suggests a structural divide between a small group operating with significant advantages and the broader base of participants. The report also identifies signs of wash trading, with approximately 15% of volume in some markets showing patterns consistent with self-trading or economically neutral positions. This has led to speculation that some of this volume may be the result of incentive farming rather than pure manipulation, particularly in light of Polymarket's forthcoming POLY airdrop, which may factor in trading volume as a metric to allocate tokens.